THE RAMIFICATIONS OF THE LACK OF AGE DIVERSITY IN FINTECH

By Nick White, Product and Marketing at MonitiseFINkit 

After gender, age is the next frontier when it comes to achieving workplace diversity. While they might be founded by millennials, fintech organisations should recognise that they could really benefit from the injection of banking industry knowledge that seniority can provide.

It’s still rare to see someone over the age of 50 in a room full of 20-somethings talking about their digital business. The average age of a coder in a fintech startup is 25, while the average CEO is just 31 years old. This is contrary to a wider trend that puts the peak age for entrepreneurial activity across all sectors at 40.

We tend to celebrate young and successful entrepreneurs, but often fail to hold older founders in the same regard. Such narrow views are indicative of a society in which ageing has mainly negative connotations. That said, it’s time for us, as an industry, to turn the tables and move the conversation on from painting an ageing population being a burden, to reflecting on the benefits age can bring.

Product development

It is no secret that a more diverse workforce brings a more varied set of skills, experience, and perspectives to the table. In fintech this will be critical: players need to develop products with a broad-based appeal in order to scale and succeed in the long run.

Doubts are already being expressed about the long-term scalability of neobanks, for example. Often, they are set up with a narrow product or market focus, which is fantastic for getting initial traction. However, if their offering or marketing fails to evolve and address the needs of a much larger customer group outside of their current, core, millennial demographic, they risk becoming irrelevant in the future, even to their existing customers.

Fintechs need to develop products that early-adopter millennial customers can ‘graduate’ to as their financial priorities change, but it’s equally important to attract new customers from different age groups and net worths from the early stages.

If fintechs only employ bright and sprightly digital natives, they could fail to spot the market opportunities that lie in catering for older customers. For example, the UK’s population of over-65s is expected to rise from 10 million in 2010 to 19 million by 2050. By 2030 the ‘silver economy’ will have grown by more than 60 per cent to £127 billion. Changes to retirement and pension regulations will make a large proportion of the population much more engaged with their finances – digital products could help cater to their needs.

Age in this case becomes an asset. Fintechs that employ older people who have first-hand, customer experience of mortgages and pensions schemes, for instance, are in a much better position to use this experience to guide product development. Asking a 20-something in a digital agency to design a mortgage application or pension service when they have direct experience of neither is like asking a 70-year-old to record a filter-laden Snapchat video and share it with their septuagenarian friends. Each party will question the value of doing so and will make no sense whatsoever to each individual.

Bringing younger and older workers together presents both groups with an amazing opportunity, as it allows them to create the world they want to live in as we all grow older.

Industry partnerships

Partnerships are key to fintech and banking innovation success. This applies as much at the micro scale within fintech teams as it does at the macro level at which fintechs and banks work together.

Younger fintech talent may benefit from the creative naïvety of youth and be well placed to ride the next, big transformative wave of banking innovation, but do they have the experience and contacts required to understand the process of building and running a business at bank-grade?

It takes a whole lot more than dedication and hard work to get a startup in shape to meet the arduous compliance requirements of working with banks – effectively the only route available to achieve mainstream scale and profitability.

Age, again, is an asset: older workers will have empathy for the client’s delivery challenge born out of experience. They will know the regulations, the internal systems, and best practice to guide any new project through to completion in the quickest way possible. And don’t underestimate the size of their black book of contacts – they are certainly handy for pulling certain strings when the initiative is at risk of derailing or stalling.

On the flip side, bank boardrooms can lack an understanding of, and aptitude for, technology and innovation. Younger and ambitious workers who are not afraid to challenge the status quo can push these veterans out of their comfort zones and drive real innovation from within.

Age is but a number. We need to move beyond ‘chronologism’, where we judge people by their age, and instead look at the valuable skills and experiences each person – young and old – has to offer.

Individuals at both ends of the age scale have much to learn from each other, and in fintech this could create the perfect synergy needed to ensure fintech companies maintain their relevance as they and their customers mature.

By Nick White, Product and Marketing at MonitiseFINkit 

After gender, age is the next frontier when it comes to achieving workplace diversity. While they might be founded by millennials, fintech organisations should recognise that they could really benefit from the injection of banking industry knowledge that seniority can provide.

It’s still rare to see someone over the age of 50 in a room full of 20-somethings talking about their digital business. The average age of a coder in a fintech startup is 25, while the average CEO is just 31 years old. This is contrary to a wider trend that puts the peak age for entrepreneurial activity across all sectors at 40.

We tend to celebrate young and successful entrepreneurs, but often fail to hold older founders in the same regard. Such narrow views are indicative of a society in which ageing has mainly negative connotations. That said, it’s time for us, as an industry, to turn the tables and move the conversation on from painting an ageing population being a burden, to reflecting on the benefits age can bring.

Product development

It is no secret that a more diverse workforce brings a more varied set of skills, experience, and perspectives to the table. In fintech this will be critical: players need to develop products with a broad-based appeal in order to scale and succeed in the long run.

Doubts are already being expressed about the long-term scalability of neobanks, for example. Often, they are set up with a narrow product or market focus, which is fantastic for getting initial traction. However, if their offering or marketing fails to evolve and address the needs of a much larger customer group outside of their current, core, millennial demographic, they risk becoming irrelevant in the future, even to their existing customers.

Fintechs need to develop products that early-adopter millennial customers can ‘graduate’ to as their financial priorities change, but it’s equally important to attract new customers from different age groups and net worths from the early stages.

If fintechs only employ bright and sprightly digital natives, they could fail to spot the market opportunities that lie in catering for older customers. For example, the UK’s population of over-65s is expected to rise from 10 million in 2010 to 19 million by 2050. By 2030 the ‘silver economy’ will have grown by more than 60 per cent to £127 billion. Changes to retirement and pension regulations will make a large proportion of the population much more engaged with their finances – digital products could help cater to their needs.

Age in this case becomes an asset. Fintechs that employ older people who have first-hand, customer experience of mortgages and pensions schemes, for instance, are in a much better position to use this experience to guide product development. Asking a 20-something in a digital agency to design a mortgage application or pension service when they have direct experience of neither is like asking a 70-year-old to record a filter-laden Snapchat video and share it with their septuagenarian friends. Each party will question the value of doing so and will make no sense whatsoever to each individual.

Bringing younger and older workers together presents both groups with an amazing opportunity, as it allows them to create the world they want to live in as we all grow older.

Industry partnerships

Partnerships are key to fintech and banking innovation success. This applies as much at the micro scale within fintech teams as it does at the macro level at which fintechs and banks work together.

Younger fintech talent may benefit from the creative naïvety of youth and be well placed to ride the next, big transformative wave of banking innovation, but do they have the experience and contacts required to understand the process of building and running a business at bank-grade?

It takes a whole lot more than dedication and hard work to get a startup in shape to meet the arduous compliance requirements of working with banks – effectively the only route available to achieve mainstream scale and profitability.

Age, again, is an asset: older workers will have empathy for the client’s delivery challenge born out of experience. They will know the regulations, the internal systems, and best practice to guide any new project through to completion in the quickest way possible. And don’t underestimate the size of their black book of contacts – they are certainly handy for pulling certain strings when the initiative is at risk of derailing or stalling.

On the flip side, bank boardrooms can lack an understanding of, and aptitude for, technology and innovation. Younger and ambitious workers who are not afraid to challenge the status quo can push these veterans out of their comfort zones and drive real innovation from within.

Age is but a number. We need to move beyond ‘chronologism’, where we judge people by their age, and instead look at the valuable skills and experiences each person – young and old – has to offer.

Individuals at both ends of the age scale have much to learn from each other, and in fintech this could create the perfect synergy needed to ensure fintech companies maintain their relevance as they and their customers mature.